03-14-2016 Council Packet - Laserfiche WebLink

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COUNCIL MINUTES February 22, 2016 DRAFT 3 project for the North Metro Telecommunications system. The North Metro staff has analyzed the 91 situation and recommends this replacement of all equipment, including a production vehicle. There 92 exists an option to issue G.O. bonds through a city and that is preferred to North Metro issuing them 93 as revenue bonds because there would be substantial savings. He explained that all the North Metro 94 member cities would pay the debt but it would actually be funded by a franchise fee. He introduced 95 Heidi Arnson, Executive Director of North Metro, and Nick Anhut of Ehlers and Associates 96 (financing consultant to the project). 97 98 Ms. Arnson explained the history of the joint powers agreement and old language included therein 99 and their request to change the language to remove a figure of bonding that was put in when the group 100 originally bonded for their building. When Mayor Reinert asked Ms. Arnson to explain further how 101 the proposed equipment upgrade project will benefit the City, Ms. Arnson reviewed in detail the 102 services provided by North Metro. She noted that seventy-three percent of Comcast customers have 103 HD in their home and for the new franchisee, Century Link, that figure is 100%. In that light, North 104 Metro would like to provide its programming with an HD signal. She feels that people really expect 105 that level of service now and it is an opportune time for the group to make the upgrade. They have 106 taken excellent care of the equipment they have now but it is just time to upgrade and it makes sense 107 to replace everything so the systems all work together. The upgrade will also mean additional access 108 in the form of HD channels. The group currently has no debt on their facility so there is the ability to 109 pay on the improvements. 110 111 Council Member Maher noted that she is the City Council representative on the North Metro board. 112 She’s a new member but one thing that she understands clearly is that North Metro does a lot of work 113 in our community. 114 115 Mayor Reinert noted that the Centennial School District pulled out of the system. Ms. Arnson 116 explained that the school district decided to move fully to their web site although North Metro still 117 broadcasts some material for them. Mayor Reinert asked if the upgrade will include internet or social 118 media play in? Ms. Arnson explained that they already stream two channels and also have video on 119 demand. She also reviewed historic data on franchise fee revenue, the revenue source identified to 120 pay for the bonds. 121 122 Nick Anhut, Ehlers, explained that he is financial consultant to both the North Metro 123 Telecommunications Commission and he does work for the City of Circle Pines. He explained that 124 an obligation of the Commission is an obligation of all its member cities. The most efficient 125 financing mechanism is the goal for any project and it’s been determined that the issuance of G.O. 126 bonds through a city is the best way to go with this project. The money to pay for the debt will be 127 remitted to cities. When the Mayor asked why the City of Circle Pines will issue the debt, Mr. Anhut 128 said that the city has offered to do it and they have a AA bond rating. There is no special benefit to 129 the issuing city. 130 131 Council Member Kusterman recognized the savings related to the different types of bonding and 132 noted that this really won’t cost the City anything because there is a reimbursement process built in. 133 He asked if the purchases involved will be exempt from sales tax? Mr. Anhut replied that purchases 134